OCT. 13 | Non-traditional outlets including Ross and Factory Card/Party Outlet are becoming DVD merchants with excess studio inventory serviced by distributor Microlaunch.
Microlaunch buys studio inventory and sells it to retailers interested in stocking DVD—and, in some cases, VHS—as impulse items. Knoxville, Tenn.-based Microlaunch has been ramping up its specialty home video services since 2000.
“It can be costly to set up a direct [distribution] relationship with a smaller account like a Ross,” said Microlaunch president Ken Franqui. “Majors want to focus on mass merchants and electronics stores. With HD DVD and Blu-ray, shelf space is getting smaller for the regular titles. We can help them expand into alternative channels.”
Typically, non-traditional accounts accept very limited quantities and hope to sell product at 30% profit margins, at $9.99 per disc and below.
Ross has been selling DVD for the past year, with Microlaunch servicing the chain with such titles as Universal Studios Home Entertainment’s Cinderella Man, Big Fat Liar and Nutty Professor II.
Illinois-based event specialist Factory Card/Party Outlet, spanning 200 outlets, has sold VHS and DVD product over the past several months. At any given time, each chain outlet usually offers six different titles. Sony BMG’s VeggieTales are among the included titles from Microlaunch.
Bed, Bath & Beyond has just started selling DVD this fall (VB, 9-22). Currently, Microlaunch is negotiating for the retailer to carry Paramount Home Entertainment’s Backyardigans DVDs, which would complement existing in-store merchandise tied to the kids series.
Electronics superstore Microcenter, with 19 stores nationwide, kick-started its DVD offerings six months ago, with such Microlaunch-delivered Universal titles as K-Pax, Kindergarten Cop and Jaws 2.
Microlaunch also is willing to tread in places studios might deem unsavory, including local swap meets.
“I fly around the country and visit flea markets, and it can be a great way to move catalog product merchandise,” Franqui said. “This is blow-out product from the studios.”
Most studios declined to comment on Microlaunch.
“Certainly, he fills a role in an environment that requires distribution into niche markets,” one supplier executive said of Franqui. “And that’s a good thing and why we looked for [his assistance].”
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